For a couple of hours or so on November 30th, I was viewing and trading “tweets” with analysts at the IBM Connect event, thinking about what angle to take with my follow-up note on IBM’s vision for the future of Information Management (IM), tossing around my concept for Systems of Insight, and playing Jeopardy against Watson, introduced to the analyst community at IBM’s Systems and Technology Group (STG) event earlier this month.

I won! I guess he/she/it is not that smart yet.

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Emerging IBM Opportunities

Aside from learning more about the impressive storage and server portfolio IBM has assembled in the last few years and its branding and initiatives around optimized solutions, the overall STG event message and what one could glean from analysts tweeting from Connect could be summed up in one word: ANALYTICS.

Given the ever-growing assortment of challenges posed by Big Data, analytics, according to IBM internally derived numbers, is potentially a $205 billion market. Throw in $181 billion for Cloud Computing and another $66 billion for Smarter Planet innovations over the next several years, and you have close to a half-a-trillion-dollar market opportunity.

As developers of Natural Language Processing (NLP) solutions and other analytic and semantic tools continue to push the envelope to make it easier for users to experience intelligent, self-guided and controlled content analytics, what this writer is referring to as Systems of Insight (SOI) will become ubiquitous. SOI will become a natural extension of what is already largely possible with monolithic analytics systems today, such as DeepQA or Watson.

Commercialization of Analytics

The commercialization of content analytics would, by design, drive or feed other initiatives of critical importance to IBM, such as cloud and mobile computing - not to mention sell lots more hardware and storage. With its development and deployment of Content Analytics (ICA), IBM has the potential to create a new computing paradigm, changing the way knowledge workers stage and view information. See IOD note. IBM’s strategy to provide industry-specific enterprise content management (ECM) solutions is a good one. But is it enough? IBM claims only a third of their partners are “industry ready” at this point.

In the near future, applications for mobile, untethered or laptop devices will likely allow business users to easily and quickly access and query huge corpora of content contained in private or public clouds and selectively view meaningful content. Perhaps users will even be able to derive more than just answers from analytics apps - even getting answers to questions they didn’t think to ask.

Emerging Markets: IBM Up Against the Numbers

Several telling IBM market data points came out of the STG event, including the fact that more than half of IBM’s opportunities in the future will come from emerging markets, which IBM defined very broadly as including small-and-medium-businesses (SMBs), new geographies, and non-IT buyers. The most sobering aspect of that market opportunity shift is how quickly IBM’s traditional IT market is shrinking. Even though IBM is making up much of the market-share loss in sales to service providers and other indirect channels, analytics has the potential to build tremendous direct loyalty with non-technical users.

Analytics is also a very broad category that includes tools for structured and unstructured data and content, sentiment analysis from social websites, predictive analytics, marketing analytics and much more.

Concerns

As several "tweeting" analysts pointed out, analytics is still largely a bottom-up marketplace - an approach favored by tech giants Google and Microsoft - and will likely be for some time. In contrast, IBM appears to be intent on building analytics loyalty primarily from the top down. It's hard to see how IBM will get its lion’s share of the projected $200 billion analytics opportunity without competing for business at the individual user level.

Google and Microsoft, for instance, also have a firm hold on end-user experience and loyalty, ease of access and low cost of entry for starter applications such as email, collaboration, and Web searching that all scale, in their fashion, well enough to be widely adopted. IBM has already lost many of those users, perhaps forever.

Bottom Line

IBM has developed or acquired great technology, products, and services but is still primarily focused on a shrinking IT market. The emerging markets IBM covets have different rules governing them than those the legacy IBM business models have traditionally supported. IBM needs to figure out a way to win the hearts and minds of the consumer nation - even if its portion of that consumer nation is only the user community within IBM’s small, medium, and large enterprise customer and prospect base.

IBM needs to build a stronger eco-system around its key brands, especially analytics (IBM partners account for 35% of total IBM revenue today), and it needs to make solutions like ICA and Watson available as wedge offerings to individual users at very low entry points. Going to market at the top end of the analytics marketplace is not enough if IBM wants to realize that half-trillion-dollar vision.

Action Item: Users who are inundated with data, in particular unstructured data or content that accounts for 80% or more of all data growth, will need to determine how content analytics will fit into their ediscovery, retention, and other critical workflows. Aspirational users need to experiment with available in-house or cloud-enabled tools, for sentiment analysis, unified information access which combines structured and unstructured data content, so-called content assessment offerings and other solutions that not only help to manage existing data and content, but have the potential to drive revenue, help with customer retention, and improve worker productivity. If only to learn what is possible, IBM should be part of any organization's analytics review process.